Australian-Singaporean medical technology company Osteopore Limited (ASX: OSX; Osteopore or Company) is pleased to announce that it has signed a non-binding term sheet (Term Sheet) with CellHeal Pty Ltd (CellHeal), a biopharmaceutical company focusing on Cell Gene Therapy (CGT) and the discovery and advancement of immunotherapeutic solutions for chronic infectious diseases and cancer.
HIGHLIGHTS
- Term Sheet to negotiate a licensing agreement with CellHeal to setup manufacturing facilities, attain regulatory approvals and commercialise select Osteopore regenerative medicine technology applications in China.
- CellHeal commits to raising AUD 10 million to fund commercialisation activities in China.
- The Term Sheet includes a proposed royalty per product of 10-20% for Osteopore as a percentage of net sales.
- The partnership with CellHeal paves the way for greater market penetration and visibility in China for Osteopore’s regenerative medicine technology.
- Osteopore and CellHeal working towards executing a definitive non-exclusive licensing agreement to develop, manufacture and commercialise select applications in China by August 2023.
- The regenerative medicine market in China was reported to be AUD 5.9 billion in 2021, a 26% year-on-year increase. The market is expected to reach AUD 19.2 billion by 2030 with a CAGR of 13-15%.
The Term Sheet provides a framework to negotiate definitive agreements for the licensing of select Osteopore intellectual properties (IP) and technologies – 3D printed biomaterials for bone, cartilage and tissue regeneration – to CellHeal, a recognised partner that specialises in commercialising products for entry into the Chinese market.
Melbourne-based CellHeal is seeking to commercialise Osteopore’s regenerative medicine technology in both China and Macau. Although Osteopore’s products do not currently have regulatory approval in China or Macau, the Company’s products can be marketed and sold in Hong Kong and Taiwan.
Subject to the terms of this Term Sheet, CellHeal commits to raising approximately AUD 10 million to strengthen Osteopore’s commercialisation efforts in China. Funds would be allocated to the setup of manufacturing facilities, clinical trials, attaining regulatory approvals and launching Osteopore’s products in China.
Osteopore will work towards negotiating a royalty with CellHeal for each product as a percentage of net sales, subject to due diligence and detailed market research. The percentage is expected to be within the range of 10-20%.
CellHeal would set up a Good Manufacturing Practice (GMP) manufacturing facility in China to manufacture Osteopore products, attain regulatory approvals and commercialise nose and dental applications relating to bone, cartilage and tissue regeneration. Osteopore would provide CellHeal with a non-exclusive royalty-bearing licence to develop, manufacture and commercialise the Company’s groundbreaking technology across China and Macau.
Osteopore would also provide equipment, consumables, management and consultation services to assist with manufacturing setup.
Upon the manufacturing facility being completed and meeting necessary requirements, Osteopore intends to order A$600,000 worth of products manufactured from the facility each year from CellHeal, at Osteopore’s wholesale price with a 10% administration fee on each order. The period over which this order is fulfilled will depend on the number of products required by Osteopore.
